Saturday, January 15, 2011

Mike Huckabee and Mitt Romney on the Fair Tax

Mike Huckabee gave an interview the other day on the Fox Business Channel where he discussed his views on the fair tax and why he liked it. To view that video, go HERE.

I like the following interview Mike Huckabee gave with Chris Wallace back during the 2008 campaign, before he was a salaried fixture on Fox. The following is a HARD BALL interview by Chris Wallace that covers the Fair Tax:

If you want to view other issues discussed in the interview above, Part 2 can be found HERE.

I thought it might be interesting if readers could see where Mitt Romney stands on the "Fair Tax". According to Romney, it may not be as great or fair as many may think. In Romney's latest book No Apology, Mitt talks about the "Fair Tax". Click on the book cover to the right to view Romney's remarks.

The most important point is that we need to cut government spending. Government spending is bleeding the country because the government doesn't produce anything. If someone removes a quart of blood from a person's body, whether that blood is removed from one arm, one leg, or an arm and a leg isn't as important as the fact that losing a quart of blood will hurt a person tremendously.

The whole debate makes me respect the Founding Fathers more for running the country on tariffs. With an income tax, the government knows what we make and how we make our money. With a national sales tax, the government is involved in every transaction between Americans. With a tariff, the government's power to tax is confined to the dock where the ship arrives. Once the tax man walks off the dock at the end of the day, he no longer has power over where Americans' money goes.

The weakest part of Mr. Romney's argument is that the tax on the very rich would decrease under a national sales tax. Most of the very rich use donations and deductions to reduce their tax burden. In doing so, they not only pay less to the government but also increase their influence over society by giving their money to charities that support their view of things. There's nothing wrong with them giving money to promote their ideas, but the deduction system means that they are getting an additional tax benefit from doing so.

How stunned Huck's traditional/populist supporters would be to find out that a flat tax would drastically curtail wealth redistribution, shifting the tax burden back to the middle class, and especially the lower class who pay nothing at all in income tax presently. True, some proposals allow for a give back to low income families, but they would have to confront the tax cost at point of purchase.

Equally devastating, from Romney's perspective, is the impact on consumption. Showing the true cost of goods including taxes at point of purchase, instead of treating taxes as a cost of doing business, will change buying behavior. Investment and saving will become a much more attractive option to many. Romney is wise to counsel against radical acts as markets love nothing more than predictability, which was his point re: the extension of the Bush Tax Cuts.

Wow - Mr. Regular-Guy has nooooo problem relying on Harvard and Stanford - elite institutions - to back up his position.

One reason I don't like this is the future potential for having BOTH an income tax and this Fair Tax. There can always be some "national emergency" requiring extra money, so the Govt can institute a temporary tax. However just like a a toll or a sponging relative, it will never go away.

Well, on the one hand, when Mr. Romney writes about the Fair Tax in in book, he does illustrate that he is quite knowledgeable about the country's current tax structure and the economic consequences that flow from that or that might flow from a change in that. However, at least in this section of his book, Mr. Romney does not present a solution.

No tax (and spending) plan is worth it, but it is clear that the current system is no good and I would certainly take my chances with the Fair Tax. Yes, even the Fair Tax is not perfect, but at least it would ensure that everyone pays their fair share and that it would not redistribute money in an unfair manner. Of course it could lead to some tax evasion, but we are on the verge of this as it is.

And don't forget the trillions and trillions of dollars parked offshore that would instantly rejuvenate our economy when brought back to the United States the very day after the Fair Tax is implemented.

The Courier journal.net/news/2010-06-16/Letters_to_the_Editor/The_Fair_Tax_is_Misrepresented.html

The Fair Tax is Misrepresented

An additional 23% tax on consumption? A regressive new tax on the poor? That is what some unscrupulous politicians would have you believe the FairTax is. It is not true, but when has the truth ever mattered in political advertisements?

The FairTax is fundamental tax reform. It completely abolishes and replaces all federal income taxes including personal, estate, gift, capital gains, alternative minimum, Social Security, Medicare, self-employment, and corporate taxes. It also replaces the “virtual VAT” that we now pay in inflated cost of goods and services because of the embedded costs of the current tax system. These embedded taxes inflate prices from 16% to 28% for an average of 22%. In addition, the FairTax defunds the IRS and calls for a repeal of the 16th amendment that allows the tax on income.

Because the FairTax includes a rebate of all federal taxes up to the poverty level, it totally untaxes the poor. The “prebate” is a refund in advance of taxes up to the poverty level for every citizen, thus untaxing the necessities of life for everyone, and precluding the need for exemptions.

Since there are no corporate or capital gains taxes with the FairTax, the United States once again will welcome the industry that was driven offshore by the second highest corporate taxes in the world. The $11 trillion to $15 trillion of dollar denominated funds parked offshore because of our onerous tax structure will flow back into our economy. Our country will become a tax haven, and with that flow of capital will come investment and new jobs. These will be real, high paying jobs, not temporary jobs as census workers. The FairTax also includes broadbased funding for Social Security and Medicare that are currently teetering on bankruptcy.

Parker Griffith has cosponsored the FairTax bill (HR 25) in the House. Unfortunately, our Senators have not yet seen fit to co-sponsor the companion bill (SR 296) in the Senate. Hopefully, with some prodding from our fellow citizens, we will gain their support. It is difficult for politicians to give up the carrot and stick power of the income tax, and we have to commend Parker Griffith for being willing to do so.

We are facing a true crisis. At the end of this year the Bush taxcuts end, and politicians are proposing all kinds of new taxes including a VAT, to pay for the out of control spending of the current Congress. Higher taxes have never resulted in higher revenues, and destroy job creation. We need jobs, not jobdestroying new taxes. So the next time you hear that the FairTax is a new 23% tax, ask for the rest of the story.

Find out more at www. ALFairTax.com. Then contact your Senators and Congressional candidates and ask them to pledge to co-sponsor the FairTax.

I wish we would stop talking about the fair tax and start talking about the flat tax...that is the only true fair tax. The fair tax, in my opinion, will lead to consumer stagnation as more and more people decide not to pay taxes by being without consumer, luxury goods. Also, I would imagine that theft would become prevalent amongst the lower class due to such a large tax put upon the goods. Everyone should be taxed 20% of their income with no deductions.

If you want to find warts in a tax system, just look at our current income tax system. The trillions of dollars burnt up each year on taxpayer compliance is just one of the big warts. Another is the billions spent on lobbying for exemptions and credits. Just a cursory glance through the US Harmonized Tariff Schedule should convince anybody that our system is flawed. Check it out:

http://www.usitc.gov/tata/hts/bychapter/index.htm

Every line item in that schedule is the result of industry lobbying.

We need a simple uncomplicated and fair system of taxation. What we have now is none of those. A Fairtax system couldn't possibly be worse.

No one here (especially Romney) understands "fair tax". Romney used the example of bill gates who would a ton less taxes. What would he do with that money? Not spend it - he would INVEST IT. A new company or rescue one going out of business. More jobs more purchasing more tax revenue. It6 would also tax all illegal income - Billions in drug/gang/prostituition income. They would finally pay.

Lastly it would make US produced goods competitive on the world market. Maybe we could sell something in China for a change?

(BTW - It would be constitutional - unlike the IRS - and "Income tax".)